Originally, I thought it was a good idea. McDonald's (NYSE:MCD) introduced a new Bacon Clubhouse Burger and was finally moving toward menu innovation that was closer to its core market of burgers and away from silly ideas like Mighty Wings and Fish McBites. In the first full month after the launch, though, domestic same-store sales fell again. Meanwhile, Wendy's (NASDAQ:WEN), the company that was once famous for its "Where's the beef?" commercials, has moved on from the meat and is upping the stakes on the bun again.
For the first quarter, Wendy's reported a same-store sales increase of 1.3% while McDonald's saw a 1.7% slide domestically. Both complained of bad weather hampering their results, but Wendy's was quick to point out that as the weather cleared throughout the quarter, sales returned to the 3% gains it was normally experiencing.
McDonald's wasn't so fortunate. After reporting flat sales for April, McDonald's domestic same-store sales went right on back to sliding with a 1% drop for the month of May. Wendy's has credited "successful production promotion" for its gains, while the same didn't seem to do much for McDonald's.
Artisan rolls rule
Interestingly, Wendy's announced that it won an award for its Pretzel Bacon Cheeseburger on May 2. The company plans to bring back this burger on the tasty bun starting in July, and possibly more permanently this time. McDonald's Bacon Clubhouse Burger is in the same league and would seem to appeal to the same demographic.
The key difference between the two is obviously the type of bun. Wendy's boats an "artisan-baked pretzel bun" while McDonald's boasts its burger as being "served on an artisan roll." It sounds like McDonald's was attempting to take a page out of the Wendy's playbook but missed the mark. The problem is that many of the target millennial market that both companies are going after doesn't really even know what an "artisan" anything is, let alone appreciate it.
McDonald's gets an "A" for effort and moving in the right direction, but a lower grade for execution. McDonald's Bacon Clubhouse Burger on an artisan roll may very well even taste better than Wendy's Artisan-Baked Pretzel Bacon Cheeseburger, but the latter just sounds better and more appealing to the younger crowd. Think about it. "Pretzel" sounds more youth-resonating than "artisan."
Part of the award release said that Wendy's Pretzel Bacon Cheeseburger is "one of the trendiest and tastiest hamburgers." Notice that "trendiest" is before "tastiest." McDonald's has to learn to appeal to the senses beyond the taste buds. Still, you have to give McDonald's credit for calling it a "Clubhouse" burger, which means that the company was probably taking notice of Wendy's pushing its new sandwich as a "pub-style" cheeseburger.
Maybe McDonald's is learning, even if not quite there yet. When Wendy's reached its scheduled end to its pretzel burger promotion, it was reported that there were virtual riots in social media demanding its return. Now that's trendy, perhaps even cultish. Maybe McDonald's could get there on its next try.
Final foolish thoughts rule
I love to root for the underdog. Despite McDonald's massive size, its constant stumbles as of late is making it feel like the little guy; after all, it certainly is little when it comes to domestic same store sales growth. McDonald's is down in the impressive innovation arena, but it's not out. A new exciting product is coming, you can almost smell it. You know that its vast team and resources are scrambling fiercely to come out with that long-overdue big winner. Watch for it.
Nickey Friedman has no position in any stocks mentioned. The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.